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Market Commentary 17/05/16

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EUR/USD – 1 Hour Supply Zone Hit

Just over the past couple of hours have we seen the supply zone which I pointed out in yesterday’s post hit, I think this supply is going to cause the market to fall due to bullish move we saw two hours ago.

The two X’s marked on the image denominate the points where the bank traders have either been taking profits off sell trades or placing buy trades to make retail traders who have sold lose money. At this point I’m still not 100% sure which one of these it is but I think profit taking is the more likely reason for the market failure to move lower.

What I would like to see now is another move higher, at the moment its possible for the market to enter into a consolidation so a break higher will confirm that this is not the case. Until we see a move higher or lower there isn’t really any levels we can use to look for trades, for now I think its best to sit and wait to see what the market does over the course of tonight.

USD/JPY – False Breakout Of The Consolidation

Today we have seen a false breakout take place outside of the consolidation USD/JPY has been in for the past 6 days.

I did say in my last post if the price comes up to the upper boundary watch for an obvious pin bar or engulfing candle to form, whilst we did see a bearish pin form it failed to cause any movement lower which tells me it a pin caused by profit taking rather than banks selling.

The price continued higher for another hour before coming to a stop and declining over the rest of the day. The reason why the market stopped where it did was because there was a collection of buy stops found between the 109.550 – 109.650 levels.

Here’s what the open orders graph looked like when the bearish pin bar had formed.

By the time the bullish candle had formed the buy stops had been consumed and the market started its fall lower.

It’s now likely for the market to continue to drop over the coming days, the drop today has formed a bearish pin bar on the daily chart which has the potential to be a good short trade if the market doesn’t manage to retrace higher before today’s close.

AUD/USD – Large Move Higher After Monetary Policy Meetings

AUD/USD made a big move higher last night when the statement from the Monetary Policy Meetings was seen as being good-by traders for the price of AUD

The move higher was quickly met with what looks to be profit taking by bank traders, this profit taking caused a move lower which came to end a couple of hours ago. Now the market is back moving higher we need to watch if the new high made by the policy meetings is broken, if it does then further upside is probable tomorrow.

The demand zone which I’ve marked is a place we can use to look for opportunities long but only if we see the new high get broken by the market, if the high is not broken do not trade the zone.

Finding Supply & Demand Zones That Work!

How Old Supply And Demand Zones Do Not Cause The Market To Reverse And The Reason Why ﻿Traders ﻿Mistakenly ﻿Believe They Do

Why The Time It Takes For The Market To Return To A Supply Or Demand Zone Will Determine Weather The Zone Has A High Chance Of Causing A Reversal To Take Place

The Differences Between Zones Created By Bank Traders Taking Profits And Zones Created by The Bank Traders Placing Trades